5 ways to cut college costs in half

A college education has long been viewed as a pathway to personal growth and higher lifetime earnings, and for many graduates that may be true. But with tuition costs climbing faster than the rate of inflation, it can also leave former students and their families with significant debt to repay — even those who hail from affluent homes.

The number of families with household income of $75,000 or more and at least one dependent under age 18 that reported having student loan debt doubled to 22 percent in 2018 from 11 percent in 2013, which reflects both the rising cost of tuition and the growing number of undergraduate enrollments over the last five years, according to MassMutual’s State of the American Family 2018 survey .

The same respondents reported average student loan debt of $44,654 this year, up from $33,214 in 2013.

“To the extent that you can minimize your college debt at the undergraduate level, you should, which can set you up a little bit better for success,” said Karen McCarthy, senior policy analyst at the National Association of Student Financial Aid Administrators in Washington, D.C. “That is especially true if you plan to pursue a graduate degree. Sometimes, students with very large undergraduate loans are shocked to find that there isn’t very much federal aid available at the graduate level, so it is best not to go into a lot of student debt.”

According to the College Board , tuition, fees, and room and board for full-time students averaged $20,770 at public four-year colleges and universities and $46,950 at private nonprofit four-year colleges for the 2017-2018 academic year.1

But most students received some form of financial aid, bringing the average net cost (sticker price minus grant aid and tax benefits) of tuition, fees, and room and board down to $14,940 at public four-year institutions, and $26,740 at private four-year colleges.2

A few well-played strategies can slash that college price further still – perhaps by half or more.

Level down a college

Your college cost-cutting campaign will be most successful if you have what colleges want.

Solid students who take tough classes, get good grades, and excel in athletics or extracurricular activities are likely to get more merit aid, also known as non-need-based aid, if they are willing to “level down.”

“’A’ students look very good to schools that get mostly ‘B’ students,” said Francine Block, president of American College Admissions Consultants in Holland, Pennsylvania. “If you find that the top schools aren’t giving any merit money, look half a step down. These are still really good schools.”

High-achieving students who opt for a less prestigious undergraduate school can often earn a degree for 50 percent less with the help of lower tuition fees and more generous scholarships and grants. The most sought after college students could even get a full ride, the holy grail of financial aid in which tuition is fully covered.

And, as an added bonus, you have a better chance of graduating college with honors as a big fish in a smaller pond than you would if you attended a more selective school, which may better position you for success, said Block.

“You get to come out on top, and when graduate schools look at your application, you may have a higher grade point average than your peers at the elite private schools,” she said in an interview.

Still worried that a lower tier school may stymie your child’s potential? Don’t be.

A 2014 study of college graduates by Gallup and Purdue University found that the type of institution they attended (public or private, small or large, selective or less selective) mattered less than what they experienced while in college — experiences that “strongly relate to great jobs and great lives.”3

According to the study, just as many graduates of public colleges as those who graduated from nonprofit colleges are engaged at work and thriving “in all areas of their well-being.”

Support and experiences in college, the study found, had more of a relationship to long-term outcomes, including opportunities to apply what they learned as an intern, active involved in extracurricular activities and groups, and work on projects that took a semester or more to complete.

Choose a zero tuition school

If you really want to minimize your tuition fee — as in, not pay a dime — more than a dozen U.S. colleges now offer free tuition. Really.

Generally, you will still incur the cost of room and board, along with books and incidentals, and you may be required to work during the academic year, as some schools offering a degree for free want their students to have some skin in the game.

FinAid.org, a free online financial aid resource, profiles each of the colleges offering zero tuition, including Alice Lloyd College in Pippa Passes, Kentucky; Cooper Union in New York City; and College of the Ozarks in Point Lookout, Missouri.

Many free-tuition schools, which include a mix of four- and two-year programs, are small and located in rural parts of the country.

Some cater to a specific major, like the Webb Institute in Glen Cover, New York, which offers a double major in naval architecture and marine engineering, and the Curtis Institute of Music in Philadelphia, which offers only music degrees.

A few are also bible-based, like the St. Louis Christian College in Florissant, Missouri, and the Barclay College in Haviland, Kansas.

FinAid.org notes that some new colleges, particularly professional schools, also offer free tuition to the first year’s incoming class to generate publicity, which is worth investigating the year you apply for college. And, for those with exceptional financial need, it reports that more than 70 colleges have implemented zero loans financial aid policies for low-income students.

College study abroad

The number of American students who study abroad before graduating from college has more than tripled in the last two decades, reaching a new high of more than 300,000 in 2015/2016, the most recent year for which data are available, according to the Institute of International Education. But the vast majority spend only a semester or two abroad.

To save some serious cash, you might want to consider packing your bags for all four years, said Block. Germany has famously abolished tuition fees for all higher education students, including those who hail from overseas, and some of the top schools in Great Britain are a relative bargain compared to their U.S.-based counterparts.

Undergraduate tuition at the University of Edinburgh in Scotland, for example, ranged from roughly $25,000 to $43,000 for international students in 2018-19, depending on the major selected, while Oxford University tuition (not including room and board) ranges from $21,000 to $32,000. By comparison, domestic Ivy League Harvard University and the elite Stanford University both charge roughly $45,000 per year.

Canadian colleges, including McGill University and Concordia University in Montreal, also offer annual tuition for far less than many top private U.S. schools depending on the course of study, said Block.

“Going abroad can mean a substantial savings for international students,” she said, who noted she had several students at the University of St. Andrews, which draws roughly one-third of its students from America. (The prestigious Scottish school where Prince William and Princess Kate were introduced offers a joint degree with the College of William and Mary in Williamsburg, Virginia.)

Block cautions, however, that students who select an international school are generally restricted to the major they chose when they were initially accepted. You cannot change your mind as easily as you can in U.S. colleges.

“You also want to look at the dark side, meaning what will happen in four years after you graduate,” Block said. “Where are the kids who go there getting jobs? Are they getting into American graduate schools? Are they getting internships back in the U.S.? I tell families you have to look at the outcome four years from now because if you can’t get work, it is not really a savings.”

Start at a community college

You can also save a bundle by getting your first two years of college credits at a local community college and then transferring to a four-year institution, McCarthy said in an interview.

And many do. In the fall of 2014, the most recent year for which data are available, 42 percent of all undergraduate students in the U.S. were enrolled in community colleges, according to the College Board.4

The average published price for an in-district, two-year public community college in 2017-18 was $3,570.5 That’s roughly $7,100 for two years of college.

And since many students who attend community college live at home, they do not incur the additional expense of room and board.

To fairly compare out-of-pocket costs, however, you will need to factor in the cost of transportation to get you to and from campus, including a car, train, or bus.

The community college and transfer option, sometimes called the 2+2 plan, is a major money saver, but McCarthy cautions students to look before they leap.

“One warning I always provide with that option is that you want to make sure all the work you do at the community college will transfer to the four-year program” she said. “A lot of community colleges have guaranteed transfer agreements with local four-year institutions, which state exactly which classes you need to take so you do not lose any of the credits.”

Check with your community college and the four-year school you are planning to attend to research your options.

Pay in-state tuition

There is also much to be gained by getting in-state tuition rates, but that does not necessarily mean you have to attend a school in your own state.

Several states have reciprocity programs in place that allow eligible nonresidents to pay the equivalent of in-state tuition at their colleges and universities.

The New England Regional Student Program , for example, also called the Tuition Break program, enables residents of Connecticut, Maine, Massachusetts, New Hampshire, Vermont, and Rhode Island to enroll in an out-of-state New England public college or university at a discount if they select a major that is not offered in their home state. The average annual tuition savings per full-time student is $7,000.

Despite the rising cost of college tuition, it is still possible to earn a degree without driving yourself into debilitating debt.

As they explore their options for higher education. Block suggests students consider not just the price tag, but the setting. Will they feel comfortable living out of state or overseas? Do they prefer a smaller, more intimate campus or a large university feel? Does the college offer courses that will propel them on their career path, or position them for graduate school?

“Finding the right college really means finding the right fit for them,” said Block.

One of our financial advisors can contact you to discuss taking care of loved ones, a family business, or a group of employees.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.

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